"Landowners burnt by land tax fiddle"

Mark Skelsey and Kelvin Bissett, NSW Daily Telegraph, 26 February 2005

PROPERTY owners have been hit with inflated land tax bills because rises in government valuations last year were more than twice actual market results.

In some council areas, median residential sale prices fell by 10 per cent, but the NSW Valuer-General decided values used for land tax calculations should be increased by 10 per cent.

The revelations have led to calls for a complete overhaul of the state's official valuation system, which is already under review by the NSW Ombudsman.

Using FoI laws, The Daily Telegraph has obtained the average residential valuation applied by the NSW Valuer-General for every council area at July 1, 2004.

The figures show the NSW Valuer-General decreed average residential values rose by 17.4 per cent across NSW and 14.9 per cent in Sydney over the year.

Some areas had extraordinary rises - Cessnock and Lismore rose 77 per cent.

The figures clash violently with actual residential sales during the same period.

The NSW Housing Department's sales report, the most comprehensive available, shows median sales actually rose by only 6.8 per cent and Sydney sales by only 2.4 per cent during the same period.

In other words, the increase applied to properties by the NSW Valuer-General was 2½ times the market trend.

The rising valuations are used to calculate land tax bills, which have been sent out this month and caused a storm of protest.

Premier Bob Carr conceded this week he may make changes to the land tax system, which has seen up to 300,000 people paying the tax for the first time.

NSW Valuer-General Philip Western yesterday said he wasn't concerned his figures were out of step with the market.

He said his increases were based on vacant land sales, combined with an analysis of local market trends, which are used to extrapolate a valuation for every NSW property.

NSW land valuations exclude the value of any "improvements" to the land - such as a house.

"Our figures reflect the current real estate market for vacant land, while the Housing Department data is based on improved properties," he said.

"There can be a wide difference between the two markets."

He also said the statistical basis of the NSW Housing Department and his report were slightly different, but admitted this did not explain the disparity.

Century 21 South-East real estate agency principal Richard Movsessian said he'd spoken to about 30 people unhappy with their valuations.

In the Botany Bay council area, government valuations have risen 12.1 per cent when the market fell by 8.5 per cent.

"Around here there's only been one vacant land sale during that time," he said.

Land tax lawyer David Singer said the figures showed that the NSW Valuer-General's figures were flawed.

"We can't get any paperwork out of the office to show how he's come up with these increases," he said.

"Why have valuations increased when there's no evidence [land values] have?"

Further Information

For further information contact:

• Simon Singer
• David Singer